Consider Adding These 3 Buy-Rated Department Stores Stocks To Your Portfolio

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Department stores have been seeing an increase in foot traffic over the past few months, which has contributed significantly to impressive retail sales data. According to the U.S. Census Bureau’s advance estimates, total retail sales for the February 2021 – April 2021 period were up 27.1% year-over-year.

Investors’ interest in the retail space is evidenced by the SPDR S&P Retail ETF’s (XRT) 15% gains over the past three months compared to SPDR S&P 500 ETF Trust’s (SPY) 6.4% returns.

With the United States now ahead of its vaccination schedule, the reopening of the nation’s economy is driving increased demand for apparel, accessories and cosmetics, among other discretionary goods.

New York, New Jersey and Connecticut have already announced their plans this month to lift most of the states’ capacity restrictions, which could provide a further boost to department stores’ sales. In fact, according to the National Retail Federation (NRF), retail sales are expected to exceed a $4.33 trillion valuation in 2021.

Given this backdrop, we think it wise to bet on Kohl’s Corporation (KSS), Macy’s, Inc. (M), and Dillard’s, Inc. (DDS) because they have plenty of room for growth.

Kohl’s Corporation (KSS)

Leading omni-channel retailer KSS has more than 1,100 stores spread across 49 states. The company is focused mainly on delivering products to the middle-income segment and sells moderately priced, private label, and national brand apparel, footwear, accessories, beauty, and home products. Its private brands include Apt. 9 and Croft & Barrow, among others, while its exclusive brands include Jennifer Lopez and Simply Vera Wang.

For its fiscal first quarter, ended April 30, 2021, KSS’ total revenue increased 60.1% year-over-year to $3.90 billion. Its net income increased 102.6% from the same period last year to $14 million. Its EPS came in at $0.09 for the quarter, up 102.6% year-over-year.

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